A power of attorney is a legal document which appoints one person (the attorney) to act on behalf of another (the donor) in areas of property and financial management.

An attorney in this sense does not necessarily mean a lawyer or solicitor. The attorney is usually a family member or close friend.

A power of attorney does not enable a person to make medical or lifestyle decisions on behalf of another. The person to make these decisions is an Enduring Guardian appointed in a separate document.

What is an enduring power of attorney?

You can make either an ordinary power of attorney or an enduring power of attorney. The difference is that an ordinary power of attorney ceases to have effect when a person loses mental capacity but an enduring power of attorney continues in force after that time.

Why make an enduring power of attorney?

Anyone can develop conditions like dementia or alzheimers or suffer a stroke or be injured in a car accident so that they are unable to manage their financial affairs and property.

Making an enduring power of attorney is a practical step you can take while you still have legal and mental capacity. It means that essential financial matters can be looked after by someone on your behalf if you lose capacity.

Who can make a power of attorney?

Any capable adult can appoint a power of attorney. If a person has a mild intellectual disability or is in the early stages of dementia, they may still be able to make a power of attorney. This will depend on their understanding of the nature and effect of the document. If capacity is in doubt, then an assessment of the person’s understanding should be made by a medical practitioner, psychologist or psychiatrist.

If I make power of attorney do I lose my rights?

No. As long as you retain mental capacity you still have authority to deal with your property and money just as you did beforehand. Also, you can state in the power of attorney document that it is not to come into effect unless you become of unsound mind or are incapable of making your own decisions. Your attorney can be required to obtain a doctor’s certificate which says this.

What happens if I don’t make an enduring power of attorney?

You can only appoint a power of attorney while you are of sound mind. It is too late if you become of unsound mind.

"Unsoundness of Mind"

If you become of unsound mind and have not appointed an attorney then you lose the ability to appoint someone to manage your property and finances. Someone will need to apply to the Guardianship Board or the Supreme Court to have a manager appointed. This means a government official located in Sydney could be making decisions on your behalf. Regular fees are charged for this service.

A caring friend and/or relative holding your power of attorney is usually a much cheaper and better alternative.

You must make an enduring power of attorney while you are in good health. Do not leave it until it’s too late.

What are the advantages of an enduring power of attorney?

It is a safe way of preparing for the future. It is an easy alternative to other forms of financial management such as an application to the Guardianship Board. It allows you to choose who you want to manage your affairs

Who should I appoint as my attorney?

Your attorney will be able to do anything you legally could do. You need to choose a person who is trustworthy and responsible enough to manage your property and finances. It is often best to appoint more than one attorney.

Before you appoint someone you should be sure the he or she will in fact do all the things that you want. Your attorney is legally bound to carry out the written instructions in the document.

If your attorney acts dishonestly or improperly, it may be possible to have the court intervene to protect your interests. Dishonesty or impropriety can be hard to prove so be careful about choosing your attorney. Also, if the attorney has acted dishonestly and spent your money, the court may not be able to make an order to recover it.

The benefit of having two attorneys acting jointly is that there is less chance of both attorneys acting contrary to your interests (eg by mistake or dishonesty).

You can appoint more than one attorney if you want to and this is often a good idea. You should choose people who are able to coordinate well with each other. You will need to decide whether you want your attorneys to act jointly (together) or severally (individually).

What powers can I give my attorney?

A power of attorney can be completely general in the powers and authority that it gives to the attorney. This is what most people choose to do.

You can limit the power as you like. You might want to limit the attorney to do something specific such as paying bills or selling your house.

You can limit the time over which the power will operate by, say, granting it for one year only.

When does my power of attorney start?

You can state in your power of attorney that you do not want it to come into effect unless you lose your mental capacity, otherwise a power of attorney starts as soon as it is signed.

How long will my power of attorney last?

An ordinary power of attorney ceases to operate when you lose your mental capacity but an enduring power of attorney continues until you die.

Any power of attorney automatically ceases to operate if your attorney notifies you that he will no longer act under the power or when you notify your attorney that the power has ceased. It also ceases if you become bankrupt or die.

The Supreme Court can also revoke a power of attorney if, for example, someone proves that the attorney is acting dishonestly. Also if either the Supreme Court or the Guardianship Board appoints a manager under the Protected Estates Act, the operation of the power of attorney is suspended. This could happen if it can be shown the attorney is unsuitable or if it is in your best interests for a management order to be made.

Can I change my mind?

You can cancel your power of attorney at any time as long as you are of sound mind. You must make sure that your attorney knows that you are cancelling the power of attorney.

How do I give a power of attorney?

You should contact our office to provide the necessary instructions. If you have assets in states/territories other than NSW you should let us know as each state has its own particular legal requirements. Generally a power of attorney which is legally valid in NSW is acceptable in the other states and territories of Australia.

Should everyone have a Power of Attorney?

Anyone who has any risk of suffering a disability, injury or illness should seriously consider it. In other words - everyone! Once you pass the age of 40, you are in a higher risk age bracket for strokes, heart attacks, etc. These typically occur without warning so it is important to be prepared.

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